It means big business for big oil companies but environmental groups say the decision was made without gathering proper information or taking into account changes in the Arctic brought on by global warming.

"This is an irresponsible move we should be looking at more renewable energy projects to solve our energy crisis, not opening up sensitive areas to oil and gas drilling," Greenpeace said.

No contingency plan

The 120,000 sq km in the Chukchi Sea is one of the largest areas ever put up for lease in Alaska

There is also concern about how an oil spill would be managed.

"No one yet has figured out how to clean up a spill in broken ice, so they just stick their head in the sand and pretend it won't happen," Brendan Cummings of the Centre for Biological Diversity said.

The leasing plan – backed by Alaska's governor as well as community and tribal leaders – will not allow drilling within 80km of the shoreline to protect the coast.

The MMS will also run ongoing programmes to monitor the impact of industry activity.

Defending the move, an MMS spokesman said that "we believe our decision is a good balance, and will allow companies to explore this intriguing frontier area while still protecting the resources important to the coastal residents".

Many protesters are angry at the timing of the announcement, which comes days before the US Fish and Wildlife Service decides whether to list the polar bear as a threatened species.

It also comes just weeks after George Bush, the US president, signed an energy bill that is supposed to move America towards alternative sources of power.

"We cannot drill our way to oil independence so opening up this area is not the way to go," Greenpeace said.